The EU unit is facing a new test in the Brexit series in Northern Ireland – POLITICO

LONDON – A British move to suspend Northern Ireland’s protocol after Brexit could pose a major test for European unity.

The protocol, which seeks to avoid the need for a land border between Northern Ireland and the Republic of Ireland to the south, has long been the most complex Brexit mystery. The compromise reached as part of Brexit negotiations kept Northern Ireland aligned with key parts of EU law, but the two sides disagree on its implementation.

Negotiations between Brussels and London on the controversial trade arrangements are intensifying this month, with the EU making a new set of proposals on Wednesday and the UK expected to offer more details on its own ideas next week.

Yet member states do not yet agree on how far to go in response if Britain pushes the nuclear button – and some fear that a trade war with Britain would be detrimental to both sides.

POLITICO spoke with officials and diplomats on both sides to map out what could happen if Boris Johnson’s government decides to act.

What the series is about

Britain wants the EU to reduce the scope of border controls on goods shipped to Northern Ireland from England, Scotland and Wales, in the face of major business disruption and deep anger from trade union politicians in Northern Ireland who see the event as a wedge between Northern Ireland and the rest of Great Britain

But Britain’s pitch for reform – outlined ia paper released in July would in fact require Brussels to have confidence in its assurances that restricted goods could not enter the EU internal market through the Republic of Ireland. The EU has warned Britain not to expect significant renegotiation.

Compromises may arise in areas such as simplifying customs procedures for goods moving from the UK to Northern Ireland, including drugs – but this will not meet all UK requirements. The focal point of the problem is Britain’s attempt to change several aspects of the protocol, which were controversial in the Brexit divorce negotiations and which the EU considers to have been clarified since the withdrawal agreement became international law.

These include the application of EU state aid rules in Northern Ireland and the supervision of the European Court of Justice (ECJ) when it comes to EU law in the region – supervision Britain wants to scrap. The latter is the biggest issue in the eyes of the European Commission, which considers it an ideological demand by British Prime Minister Boris Johnson rather than an issue that directly affects Northern Ireland’s businesses and citizens.

The Commission now accepts that the UK is likely to unilaterally suspend parts of the Protocol before Christmas through its Article 16 mechanism, which allows each side to act to avert trade problems or “serious economic, societal or environmental difficulties.” Johnson and his Brexit husband David Frost have made it clear that they believe this test has already been met.

What could Britain do?

The Commission’s formal response to the UK’s proposal – due on Wednesday – will include an exemption for “food with national identity”, which allows sausages and other products to enter Northern Ireland from the UK after the expiry of previously agreed deadlines, an EU said the official.

Frost will this week submit a new legal text to the Commission, which will form the basis of a new protocol.

In a speech in Lisbon on Tuesday, Frost will warn EU proposals are insufficient. He wants to push the bloc to lift its ban on British chilled meat entering Northern Ireland from the rest of the UK and remove the oversight of the European Court of Justice in the region, claiming that the court “has created a deep imbalance in the way the protocol works on. “

This will open a period of intense talks that London would like to last a maximum of three weeks, Frost told the Conservative Party Conference. Under this timetable, the UK will refrain from taking unilateral action until at least mid-November.

The UK is expected to opt for a partial suspension, limited to those areas where no compromise is reached. This can be achieved by refusing to implement Articles 5 and 7 in the Protocol dealing with customs duties on goods entering Northern Ireland from any other part of the United Kingdom as well as certification and standards.

Depending on the outcome of the negotiations, the United Kingdom may also add Article 10 to the mix. This requires the UK to notify Brussels of any State aid decisions that benefit UK companies supplying goods to Northern Ireland. Rewriting Article 10 is one of Frost’s key requirements.

Suspension of the protocol — considered the worst case of the bloc, but backed by even the most moderate members of Johnson’s cabinet — would give Britain an opportunity to impose its own solutions. London would buy time to gather evidence to support its hypothesis that Britain’s approach does not in fact undermine the EU’s internal market and convince Member States that retaliatory trade measures would be more painful for their own economy than for Britain’s.

How would the EU react?

The ball would then be in the EU court. Article 16 of the Protocol gives the bloc the chance to retaliate with “proportionate rebalancing measures” if the UK does not comply with its terms. Although it is a distant perspective, the possibility of tariffs on valuable UK exports such as cars is already floating.

“There would be a trade war,” an EU diplomat said when asked what the EU’s response would be. “But it will not be immediate.”

However, the time is on Britain’s side. The United Kingdom would have to give Brussels one month’s notice before invoking Article 16. This would launch a lengthy consultation process in the EU-UK Joint Committee on Withdrawal Agreement, in which the EU is represented by Commission Vice-President Maroš Šefčovič and Frost by the UK.

The EU would then consider its options and is likely to reactivate two interrupted lawsuits it initiated against Britain in March. Only when all its legal avenues have been exhausted would duties be imposed.

The commission remains in “non-escalation mode” and is concentrating on finding solutions, an EU official said. Work on a response to Britain began before the summer, but officials preferred not to have a list of possible measures that could leak to the press and poison negotiations.

Nevertheless, the recent threats from Frost and growing anxiety among EU countries have pressured the Commission to reactivate this work, and it now plans to consult with EU ambassadors in Brussels on faster retaliatory measures, said one of the diplomats.

Why it could load device

Accepting an EU-wide response to Article 16 would be a delicate balancing act. Diplomats from some Member States are unsure of the impact tariffs may have on their own national economies, as well as trying to recover from the pandemic.

“Exactly what retaliation is being taken, how fast it is happening and how hard it is biting will be a test for EU unity,” said Raoul Ruparel, a former Brexit adviser to Theresa May as British Prime Minister.

Two diplomats said France’s anger over AUKUS, the new Indo-Pacific alliance that resulted in Paris losing a multibillion-dollar contract to build submarines for Australia; an ongoing dispute with the UK over fishing permits in the canal; and a dispute over asylum seekers crossing the canal could cause it to push other EU capitals beyond what they are willing to accept.

“The root of the problem is, in a way, the very poor state of the British-French relationship,” said Charles Grant, director of the Center for European Reform Think Tank. “It is so bad that it makes the French quite reluctant to help the British in Brexit issues at all. And, of course, the French have a lot of influence on the EU institutions. ”

Grant argued that if Britain “began to get serious about diplomacy” and tried to “behave better and make some friends in Europe, there would be a threat to unity because not everyone would follow the hard line that the French follow.”

A trade war would be a negative outcome for all sides, so EU countries will do their utmost to avoid tariffs, said a fourth diplomat representing a member state with a high level of bilateral trade with Britain

“History has shown that EU countries have been united on Brexit because everyone agreed that the defense of internal market integrity was more important than any advantage one could have bilaterally with Britain,” they said. And they insisted, “Unity will prevail.”

Among the measures being considered is the permanent freezing of a Memorandum of Understanding on Financial Services, which was negotiated by the UK Treasury and the Commission earlier this year but has not yet been signed by EU governments. Freezing Britain’s participation in Horizon Europe, the EU’s research and development program – which Britain hopes to join this year – is also flowing.

Still, Ruparel believes neither of these two moves would force a change in Britain’s position given the strength of the sentiment in the Downing Street protocol – whereas high tariffs on cars and other significant exports or suspension of data equivalence just might. “The only real tough enforcement the EU has here is how much pain they can cause Britain – and does that pain cost Britain more than it appreciates what it will do in Northern Ireland?”

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